Trigger Orders for Automated Entries, Stops, and Profit Taking
Summary
A trigger order waits for the market’s last price to reach a specified trigger level, then submits an order at a separately chosen price and quantity. The examples show how the setup can be used to exit a losing position, buy after a decline reaches a trigger, or place a take profit order after an advance. In each case, the trigger condition and the submitted limit price serve different purposes.
The document notes that assets are not reserved before activation and that orders can fail because of balance, quantity, price-limit, trading-status, network, or system constraints. Even when a limit order is successfully submitted, execution is not guaranteed. The examples are illustrative and offer no evidence about profitability or protection from fast market moves; traders must account for prevailing liquidity and platform rules.
Key ideas
- A trigger order submits a preset order after the last traded price reaches its trigger level.
- The trigger price and the submitted order price can differ.
- Trigger orders can automate entry, stop-loss, and take-profit actions.
- A triggered limit order may remain unfilled, and activation or submission can fail under platform constraints.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.